As Brazil’s fuel market faces increasing regulatory challenges, INFRA news agency reports that the board of directors of the National Agency for Oil, Gas and Biofuels (ANP) recently unanimously rejected a request by the National Union of Distributors of Fuel and Lubricants Companies (Sindicom) for a 90-day moratorium on the use of biodiesel blends containing 14% diesel (B14).

The request was reportedly first forwarded to ANP by Sindicom on March 12, citing the union’s concerns over frequent sales violations in the market, particularly the failure of some agents to strictly follow the prescribed blend ratios for selling biodiesel blends. However, the assessment of the irregularities within the ANP presents a different voice, with ANP rapporteur Fernando Mora pointing out that “while it is true that irregularities exist in the industry, the sensitivity of the agents has been significantly amplified, and the actual irregularities are far from being as frequent as they have been portrayed.” Director Daniel Maia also emphasized, “Violations occur occasionally, but they do not constitute a systemic problem and are not sufficient to support the need to suspend the use of B14.”

The decision reflects the prudent considerations made by ANP in balancing market stability with strict regulation. On the one hand, regulators must pay close attention to the safety hazards and potential problems associated with the use of biodiesel blends; on the other hand, excessive administrative intervention could disrupt the normal functioning of the fuel market and cause unnecessary distress to the supply chain and end-consumers.ANP’s decision is intended to ensure that regulatory measures are strengthened while maintaining the healthy and orderly development of the market.

Looking ahead, ANP said it will continue to closely monitor the industry’s dynamics and strengthen the regulation of the sales of biodiesel mixtures to ensure that the quality of the product and the order of the market are improved simultaneously, and at the same time, promote the green transformation and upgrading of the entire fuel industry.

April 4 – The National Association of Convenience Stores (NACS), the National Association of Truck Service Stations (NATSO), and the Society of Fuel Marketing Associations (SIGMA) recently sent a joint letter to Lee Zeldin, Administrator of the U.S. Environmental Protection Agency (EPA), expressing serious concerns about the possibility that the EPA may have set the Renewable Vehicle Oil Standards (RVOs) too high in the absence of an extension of the 40A biodiesel blending tax credits. serious concerns. They warned that such a move may lead to a spike in RIN (Renewable Identification Number) prices, which in turn would push up retail diesel prices and increase the burden on consumers.

The three associations noted that if the EPA pushes through unrealistic biofuel quotas that cannot be effectively absorbed by the current market, it will inevitably impact the fuel market and exacerbate inflationary pressures. “Without the supporting support of tax credits, a high quota policy will not only not help the market grow, but will take a direct hit on consumers’ wallets.”

The letter emphasizes that while the retail fuel industry supports policies that increase energy independence and stabilize supply, the current biofuels market is in crisis. Since the expiration of the 40A blending tax credit at the end of 2024, coupled with the poorly structured newly introduced 45Z clean fuels production credit, the U.S. biofuels supply chain has been hit hard.EPA data shows that since the end of the tax credit, the total amount of biodiesel and renewable diesel fuel has declined by 58.8%, and is down as much as 50.2% year-over-year.

According to publicly available data, more than 20 U.S. biofuel plants will be shut down or out of service by 2025, involving a market share of nearly 15 percent and a production cut of up to 750 million gallons per year. Of these, Iowa, a large biodiesel-producing state, could close most of its 10 plants, which account for nearly 20 percent of the nation’s biodiesel capacity.

The three associations called on EPA to take full account of these market disruptions in the absence of tax credit renewals and to exercise caution in setting a new round of renewable fuel quotas. They expressed their willingness to work with EPA to advance fuel policies that benefit consumers and are consistent with the administration’s energy transition goals.

Varo Energy, backed by private equity giant Carlyle Group (CG.O), and global trading leader Vitol Group announced on Monday that they have agreed to acquire Swedish refinery operator Preem, capitalizing on the growing demand for biofuels. Varo already holds stakes in refineries in Germany and Switzerland and is expanding its sustainable fuels and trading business. The company plans to invest approximately $3.5 billion between 2022 and 2026, with two-thirds allocated to sustainable energy.

The merger will position the combined company to supply about 10% of Europe’s road and marine fuels, making it the second-largest renewable fuel producer in Europe. Preem has an annual production capacity of 1.3 million tons of renewable fuels and operates two refineries with a total capacity of 352,000 barrels per day. Following the merger, the combined company will have a total refining capacity of 530,000 barrels per day.

In the current global trade environment, protecting the EU biofuels industry from external threats is just as important as promoting more rational internal EU policies. In the past, trade cases were often seen as a short-term response, but today they have become a long-term concern for the industry. The EU is strengthening its trade defenses to preserve fair competition and industry independence.

At the same time, policy drivers are changing. In addition to the Renewable Energy Directive (RED), regulations such as ReFuelEU Aviation and FuelEU Maritime are driving demand for biofuels. However, these policies may benefit non-EU producers, resulting in a disconnect between EU fuel regulations and trade rules. The European Biodiesel Board (EBB) has called on legislators to address this issue to ensure that the EU industry is the main beneficiary of the policies.

In addition, biofuel fraud in Southeast Asia poses a serious threat to the EU market, with EBB pointing to loopholes in sustainability certification systems and doubts about the origin of some imported fuels’ feedstock. To curb fraud, EBB has submitted reform proposals to the European Commission and ISCC to push for stricter certification rules. Revising the EU’s certification system for sustainable biofuels will not only maintain fair competition in the market, but also help to strengthen the EU’s climate and energy goals.

The Trump administration has urged oil and biofuel producers to reach a compromise on the future of U.S. biofuel policy in an effort to avoid political conflict during his first term, Reuters reports.

The oil industry and biofuel producers have long competed for billions of dollars worth of U.S. gasoline market share and have often clashed over the Renewable Fuel Standard (RFS), a federal program that requires billions of gallons of ethanol and other biofuels to be blended into the nation’s fuel supply.

At least two meetings have been held at the direction of the White House, including one last week hosted by the American Petroleum Institute (API).

Attendees included Will Hupman, API’s vice president of downstream policy, and the meetings discussed key issues such as future biofuel blending requirements, small refinery exemptions, and biofuel tax policy.

Any agreement between the two industries could affect the Trump administration’s future approach to biofuels policy.

Discussions have ranged from 4.75 billion to 5.5 billion gallons, with some parties wanting to reach higher production by 2026 and others pushing for more gradual growth, three sources said. Blending regulations for ethanol are capped at 15 billion gallons, and the parties see limited prospects for growth as gasoline demand levels off, the sources said.

The parties are divided over RFS exemptions for small refineries, one of the most contentious issues, the sources said. In Trump’s first administration, the EPA granted a record number of such waivers to allow small refineries to circumvent blending obligations and sparked strong opposition from Republican allies in the farm belt, who said the move was punishing farmers.

The International Sustainability and Carbon Certification (ISCC) has recently expressed strong opposition to the European Commission’s discussion of a possible moratorium on the accreditation of waste-based biofuel certification. It is understood that the European Commission is considering suspending the agreement for two and a half years, but this decision is subject to legal review and member state approval.

In its statement, ISCC said it was surprised by the proposal and emphasized the key role it has been playing in enforcing strict sustainability standards and anti-fraud measures in the market. Over the past two years, ISCC has worked closely with the European Commission and member states to actively support the investigation of suspected fraud and strengthen compliance regulation.

ISCC said, “We are unable to understand the rationale for this measure, which appears to be ad hoc and unfounded.” The organization added that no certification system in the current marketplace is more effective at preventing fraud than ISCC EU.

ISCC warned that the suspension of its certification accreditation would have a serious impact on the waste-based biofuels supply chain, potentially undermining the ability of the companies involved to fulfill blending requirements, and in turn destabilizing the market. In addition, ISCC questioned the legal basis for suspending its accreditation, arguing that the move did not follow proper procedural norms and was clearly discriminatory as it only targeted ISCC EU.

Despite the uncertainty, ISCC assures all stakeholders that the organization remains in active dialogue with the European Commission and will take all necessary measures to prevent further market turmoil. If the measure is ultimately implemented, it could also have a knock-on effect on the bunkering of biofuels, with a number of fuel suppliers and trading companies having recently been certified by ISCC to supply biofuel blends to the market.

A white paper published by DNV (Det Norske Veritas) states that despite rapidly growing sales of bio-blended marine fuels in ports such as Singapore and Rotterdam, maritime transportation will account for only 0.6% of global liquid biofuel consumption as of 2023. The report tracks developments in biofuel supply, regulations and technology, and gathered feedback from 12 shipping companies and eight biofuel suppliers.

According to the report, 111 million tons of oil-equivalent liquid biofuels (mainly ethanol, FAME, and HVO) were produced globally in 2023, of which 98.9% was used for road transport, with aviation accounting for 0.5%. Nonetheless, the demand for biofuels in the marine sector is gradually rising, especially for B20 to B30 blends. in 2023, sales of B24 bunker fuel reached 518,000 tons in Singapore, and demand for B30 blends in Rotterdam is also increasing.

However, the widespread use of biofuels in shipping still faces a number of supply bottlenecks, notably a shortage of sustainable feedstocks, logistical barriers and regulatory fragmentation.

Looking ahead, the report notes that the International Maritime Organization’s (IMO) medium-term GHG measures planned for 2027 will include GHG fuel standards and economic incentives. Combined with the EU’s FuelEU maritime regulation, which will come into force from 2025, these initiatives are expected to further promote the use of biofuels. The International Maritime Organization may certify biofuels under these regulations, provided that the fuel meets the relevant certification requirements and is capable of achieving at least 65% well-to-tail GHG reductions.